Source: Brokerage China
Musk's Tesla lost money on its Bitcoin investment last year.
In Tesla's latest 10-K annual report filed with the U.S. Securities and Exchange Commission (SEC), Tesla claimed to have recorded an impairment loss of approximately $101 million (about 642 million yuan) for the year ended December 31, 2021, due to changes in the book value of the company's bitcoins. However, compared with Tesla's net profit of $5.519 billion (about 35 billion yuan) last year, the above-mentioned impairment loss is not large. As of the end of last year, Tesla still held nearly $1.99 billion (about 12.6 billion yuan) of bitcoin.
The data shows that bitcoin rushed to a high of $67,000 last year, but then continued to fall, falling below $35,000 in January this year. In the face of sharp market volatility, many institutions continue to be bearish on Bitcoin, and in January, JPMorgan Chase lowered its long-term theoretical price target for Bitcoin from $150,000 to $38,000.
Since the beginning of this year, there have been many negative news about Bitcoin. Recently, the chairman of the U.S. Securities and Exchange Commission said that he refused to approve bitcoin ETFs on the grounds that bitcoin is vulnerable to fraud and manipulation.
It is also worth noting that Tesla's revenue in the Chinese market soared more than 1 times last year to 88 billion.
Tesla Bitcoin lost more than 600 million yuan, and last year's revenue in the Chinese market reached 88 billion
Musk is an avid fan of virtual currencies, and Tesla is also investing in Bitcoin under its leadership. On February 8, 2021, Tesla's filing with the U.S. Securities and Exchange Commission revealed that it had purchased a total of $1.5 billion in bitcoin and may have purchased and held digital assets from time to time for a long time. As soon as the news of Musk personally "speculating" came out, the price of Bitcoin soared again, and on the same day, Bitcoin rose as high as 18.8%, breaking through $46,000 / coin.
It is estimated that Tesla will cost less than $35,000 to buy Bitcoin. At the time of the disclosure of relevant data in February 2021, Tesla's floating profit exceeded 71%, and the floating profit amounted to more than 1.069 billion US dollars, which was about 7 billion yuan at the exchange rate at that time, exceeding Tesla's profit of 721 million US dollars for the whole year.
After Tesla disclosed the "coin speculation" in 2021, the price of Bitcoin rose and fell several times, and once soared to a record high of $67,000 in October 2021. However, bitcoin then began a shock correction, falling below $35,000 in January this year. It should be noted that as of the time of the chinese reporter's press release, the price of bitcoin is around $42,000, which is still higher than tesla's cost price.
In its latest 10-K filing, Tesla disclosed that in the year ended December 31, 2021, it had accrued an impairment loss of about $101 million (about 642 million yuan) due to changes in the book value of the company's bitcoins. As of December 31, 2021, tesla's holdings of bitcoin were worth $1.99 billion (about 12.65 billion yuan).
The latest 10-K filing also discloses Tesla's revenue data in major markets around the world. According to the data, Tesla's revenue in the Chinese market reached 13.844 billion US dollars (about 88 billion yuan) last year, a year-on-year increase of 107.8%.
Tesla's revenue in China increased significantly, mainly due to the increase in production and deliveries at the Shanghai Gigafactory. According to the statistics of the Association, Tesla's deliveries in China reached 484,130 units last year, accounting for 51.7% of Tesla's global 936,000 deliveries.
The big guy bulls and bears are fiercely controversial
Under the sharp fluctuations in the market, the long-short debate between bitcoin investment giants has become more intense. JPMorgan said in late January that its long-term price target of $150,000, which it proposed last year, was unlikely to materialize in the foreseeable future. JPMorgan notes in the report that bitcoin's price is down 50 percent from its nearly $69,000 peak last November, highlighting the extreme volatility of the cryptocurrency that will discourage institutions from adopting bitcoin further. JPMorgan lowered Bitcoin's long-term theoretical price target from $150,000 to $38,000, which is based on the relative volatility and market size between gold and Bitcoin.
JPMorgan chase said: "The biggest challenge facing Bitcoin in the future is its volatility and boom-bust cycle, which hinders further institutional adoption. ”
JPMorgan also released a 31-page cryptocurrency market report, written by Michael Cembalest, chairman of Asset Markets and Investment Strategy. In the report, Cembalest criticizes and questions various cryptocurrency market issues, from the store of value, the status of the medium of exchange, cross-border remittances, NFT and DeFi markets, and so on.
Cembalest believes that bitcoin's price volatility is too high, and it will rise and fall with the market, so it cannot avoid systemic risk. Cembalest also pointed out that cryptocurrencies such as Bitcoin, in addition to the systemic risks of financial markets, also have regulatory risks, hacking news reports and other sources of volatility, and Bitcoin is more concentrated in the hands of a small number of people than other financial assets, which makes the market easier to be operated by large investors, and a large number of dumping and pulling plates lead to sharp rises and falls. According to the report, in the six months of 2018 alone, financial institutions have detected more than 355 dumping and dumping market events, compared with about 142 events in the stock market in 11 years.
In a recent article, Nobel laureate economist Paul Krugman compared the collapse of cryptocurrencies to the U.S. subprime mortgage crisis, citing "disturbing similarities" between the two.
Krugman writes: "Cryptocurrencies (i.e. digital currencies) do not threaten the financial system, and the numbers are not big enough. But there is growing evidence that the risk of cryptocurrencies falls disproportionately on those who don't know what they're doing. They don't know what they're going to face and can't cope with the disadvantages. ”
The subprime mortgage crisis began in 2007 and triggered a global recession. During the crisis, the huge housing bubble created by loose mortgage standards burst, creating a domino effect: mortgages were insolvent, foreclosure, and the mortgage-backed securities (MBS) peddled by big banks were generally downgraded. Eventually, many borrowers lose their homes, and investors who buy these bad mortgage bonds, including pensions and retirement plans, are left to fend for themselves.
Krugman said there is a similar dynamic in today's crypto market, where investors are sometimes carried away by the hype without properly understanding the associated risks.
However, Michael Seyler, founder and CEO of MicroStrategy, the world's largest bitcoin-holding listed company, recently reiterated that he would never sell any of his bitcoin holdings, and the bitcoin majority said that he would not be tempted to sell any crypto assets, even in the face of a long-term bear market.
In a recent interview, Selejan said: "We are not sellers. We just buy and hold Bitcoin, right? This is our strategy. ”
Recently, as bitcoin volatility has dragged its head, MicroStrategy's share price has fallen from $891.39 from last year's high to the latest $391.64.
Strengthen Bitcoin regulation globally
Regulators around the world are generally wary of virtual currencies, including Bitcoin. Martin Gruenberg, acting chairman of the Federal Deposit Insurance Corporation (FDIC), said in a list of priorities released Monday that regulators need to provide "strong guidance" to the banking industry on the risks associated with digital asset management. Banking institutions must consider the risks posed by cryptocurrencies and "determine the extent to which banking organizations can safely participate in crypto-asset-related activities."
According to Xinhua News Agency, on January 25, the executive board of the International Monetary Fund (IMF) urged the Central American country of El Salvador to revoke bitcoin's legal tender status, warning that there are great risks to bitcoin use in terms of financial stability and so on.
The IMF Executive Board issued a statement after concluding its Article IV consultations with El Salvador that the executive directors believed that there was a need for greater regulation of Bitcoin, whose use was risky in terms of financial stability, financial integrity, consumer protection, and related fiscal and debt, and urged the Salvadoran authorities to revoke Bitcoin's legal tender status. Some executive directors have expressed concern about the risks of issuing bitcoin-backed bonds.
The Salvadoran parliament passed a bill last June approving bitcoin as the country's legal tender. The bill went into effect last September, and El Salvador became the first country in the world to officially recognize Bitcoin as legal tender. The Salvadoran government also plans to issue bitcoin bonds in 2022. Due to the large fluctuations in the value of Bitcoin, the difficulty of practical operation, and the chaos of financial supervision, many Salvadoran people oppose the setting of Bitcoin as legal tender.
On February 4, local time, the chairman of the U.S. Securities and Exchange Commission (SEC) Gensler said that he refused to approve a Bitcoin ETF on the grounds that Bitcoin is susceptible to fraud and manipulation.